Renting a home cheaper than owning one

by Betty Beard - Apr. 6, 2008 09:05 PMThe Arizona Republic

The recent rise in Phoenix's housing prices means that in some cases the cost of owning a house grew too high compared with the cost of renting one, says a new report from the Center for Economic and Policy Research, in Washington, D.C.

Based on 2006 housing costs, the cost of renting in the Phoenix area averages $862 while the average cost of owning can range from $1,343 to $1,804, depending on interest rates, the report said. That means that Phoenix rental costs can range from 47 to 64 percent of ownership costs.

The report says that when ownership costs exceed 50 percent, it indicates a bubble. Some "extraordinary" gaps include New York City, where it costs 109 percent more to own a home than to rent; San Diego, 133 percent; San Francisco, 161 percent; and Los Angeles, 168 percent.